Daily News Editorial
We’ve had some questions as to why we sometimes run stories about bad economic news on the national level while at the same time the economy in Iowa is faring comparatively well.
Those are good questions. Let’s try to answer them.
We agree that things aren’t nearly as bad here in the ethanol belt as they are on the coasts and metropolitan areas where an estimated 2 million people are in danger of losing their homes. By comparison, home values seem to be holding their own pretty well right here in Iowa.
Whenever possible, we will try to run “disclaimer” stories showing that things aren’t all that bad here. We think it’s important that we offer an accurate picture of our regional economy.
By comparison, we also think it’s important to keep people abreast of what’s happening nationally for a number of reasons.
First of all, we are being impacted by the national housing crunch, namely with tighter credit. Lenders are looking more keenly at borrowers’ ability to pay. Then again, maybe if they had done that to begin with throughout the country before all this housing mess started, it would never have happened.
Another reason is that what happens in other parts of the country affects how we invest here. We may decide to hold back on buying certain financial stocks right now, for example, and look at buying stock in steel companies (that’s not a recommendation, by the way).
Housing isn’t the only thing that’s putting a damper on the economy. Energy costs are too. Between record prices for gas and diesel and lower-income homeowners even in our area having to choose between heat and food, we are feeling the pinch. Just about everyone is a little more careful about how he or she spends that paycheck nowadays.
Higher energy costs mean higher prices on the grocery shelf too. If you’ve been grocery shopping lately, you know that for a fact. We all have had to tighten our belts over the last six months or so.
While the “R” word seems accurate nationally, we may be cushioned a bit here in the upper Midwest. That doesn’t mean that we shouldn’t be careful about our spending and investments, though.
If you absolutely need to buy a big-ticket item like a home or a vehicle, then you should do it. But also be aware that what’s happening to the markets on the coasts and even on the other side of the world today can affect our economy tomorrow. If the Chinese start eating pork the way they eat rice, there won’t be enough room for all the hog confinements in Iowa. That should make the pork producers happy. Then of course things can go south too.
And that’s just one illustration of how global our economy really is.